Stocks Fall on Earnings Warnings

Stocks slumped today as
investors were jolted by a new batch of bleak corporate
earnings forecasts including a bombshell from Britain's Marconi that its profits would be halved this
year.

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The announcement from the leading telecommunications
equipment maker hit related technology stocks worldwide. But
investors returning from the Independence Day holiday,
which closed financial markets on Wednesday, still got more bad
news from retailer Federated Department Stores and
other companies.

Tech heavyweights, including Web gear giant Cisco Systems, led the Nasdaq Composite Index to a loss of 60.60 points, or 2.83 percent, at 2,080.20, according to the latest available data. Nasdaq, which logged its fourth down
session in a row, saw nearly two stocks fall for each gainer.

"It basically stems from the Marconi announcement which
started a new sell-off in tech stocks across the board. The
news was pretty bad," said Peter Cardillo, director of research
at Westfalia Investments.

But the selling was a "bit exaggerated", Cardillo noted,
adding that trading volumes were very low with many people
still on holiday and with others fence-sitting ahead of Friday's key U.S. unemployment report for June. Economists on average expect the unemployment rate ticked up to 4.6 percent from 4.4 percent in May.

Marconi lost $3.68, or a whopping 52.3 percent, at $3.35 in
U.S. trading and was Nasdaq's third most-active stock. The
company blamed the global telecoms industry slowdown and the
Marconi woes spread to other issues including Finland's Nokia, the world's biggest mobile phone maker, which fell $1.84 to $20.35 and U.S.-based telecom gear giant Lucent Technologies , off 39 cents at $6.30.

Dutch computer chip equipment company ASML Holding, fell $1.42 to $20.80 on the Nasdaq. The Philadelphia Stock Exchange's semiconductor index fell
3.11 percent, reflecting a drop in a number of sectoral firms
including sectoral giant Intel, down 62 cents at $29.84.

A bright spot was the energy sector as stocks rose across
the board, partly in line with firmer crude oil prices after
new data showed U.S. petroleum stockpiles fell sharply last
week. The S&P oil and gas index rose 1.71 percent on
gains by the likes of Apache Corp , up $1.51 to $51.01.

Waiting for Jobs Report

In economic news, the National Association of Purchasing
Management reported its June index of non-manufacturing
activity rose to 52.1 from 46.6 in May.

The government reported U.S. weekly jobless claims rose to
399,000 for the week ended June 30, in line with economists'
estimates, from a revised 392,000 in the prior week.

The main economic event this week comes Friday when the
government reports on U.S. payrolls.

Analysts cautioned against reading too much into the
market's action during the rest of the week.

On the NYSE, 692 million shares changed hands, while on the
Nasdaq, about 979 million shares were traded.